Wal-Mart to expand health benefits

Marcus Kabel, The Associated Press

Published
10:00 pm PST, Thursday, February 23, 2006

BENTONVILLE, Ark. -- Wal-Mart Stores Inc., under attack for its health care coverage for its employees, plans improvements that would include expanding the availability of its lowest cost plan and shortening the waiting periods to enroll part-time workers and their children.

At the same time, Wal-Mart Chief Executive Lee Scott said Thursday that employers cannot continue to meet the rising costs of health care and urged a government-business partnership to find an answer.

The announcement marks the second time in six months that the world's largest retailer has moved to improve health benefits. They also come before Scott's speech Sunday about the issue to the nation's governors, who are looking for ways to cap rising costs for taxpayer-funded health plans that cover the uninsured. Details of Wal-Mart's new health benefit plans are expected to be unveiled in the coming months.

Scott also is expected to renew Wal-Mart's criticism of bills filed in at least 22 states that would force the retailer to spend more on health care. Maryland has become the first state in the nation to require Wal-Mart to spend more on employee health care or pay the difference into the state's Medicaid fund. The Retail Industry Leaders Association has challenged the law in court.

Washington state legislators considered a similar measure pushed by organized labor, but the bill died earlier this month in the state House. Democratic Gov. Christine Gregoire has pledged to work on perfecting the bill, and believes a new version will pass the state Legislature next year.

"The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees," Scott said in a statement released before the speech to the National Governors Association.

Wake Up Wal-Mart, one of Wal-Mart's harshest critics, called the retailer's attempts to improve its health care plan as "nothing more than a facade."

"Wal-Mart's proposed changes are clearly designed to try and salvage a faltering public image, rather than make substantial changes to improve health care benefits for its employees," Paul Blank, campaign director for Wake Up Wal-Mart, said in a statement.

The labor-backed group released a report Thursday that showed the health care issue at Wal-Mart is getting worse -- Wal-Mart failed to provide health coverage to more than 57 percent of its employees last year, up from 52 percent the previous year. The group said the report is based on a new analysis of Wal-Mart's reported data of its health care spending.

Under mounting criticism from organized labor and other groups, Wal-Mart last fall offered new, lower-premium insurance aimed at getting more of its work force on company plans.

The company said premiums of $23 a month -- and as low as $11 in a select number of locations with special deals with medical providers -- helped get 70,000 workers enrolled in Wal-Mart plans for the first time.

Wal-Mart had 615,000 employees enrolled in company health plans as of January versus 568,000 a year earlier, Wal-Mart spokeswoman Sarah Clark said. It has 1.3 million U.S. employees.

Scott said new steps would include expanding the $11 monthly premium to make it available to half of all U.S. employees by next year and shortening eligibility periods for part-time workers and their children from 24 months. Wal-Mart is still deciding what the wait will be, a company spokeswoman said.

Wal-Mart also will expand a trial run of in-store clinics, which are aimed at providing lower-cost non-emergency health care to the public, to more than 50 stores this year from about a dozen now. Several retailers are testing the idea as an alternative to long waits at doctor's offices for minor ailments and tests.